HMV files for administration

Entertainment retailer HMV has called in administrators following a steady decline in sales and mounting debt.

The high street CD, DVD and games retailer has called in Deloitte, which will attempt to find a buyer for the company and its 239 UK stores. These will continue to trade throughout the process, though ultimately some 4,350 jobs have been put at risk following the news.

HMV released a statement claiming that "as a result of current market trading conditions, the Company faced material uncertainties and that it was probable that the Group would not comply with its banking covenants at the end of January 2013."

The result of this is that "the Board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection, and in the circumstances therefore intends to file notice to appoint administrators to the Company and certain of its subsidiaries with immediate effect."

HMV's shares on the London Stock Exchange have been suspended following the news.

The company, which opened its first shop on London's Oxford Street in 1921, has struggled to adapt to the rise of the digital download as the primary means of consuming music. It's also faced increased competition from supermarkets for sales of physical media.

HMV's troubles follow hot on the heels of those of Jessops, the camera retailer that went into administration last week. While that high street giant has now closed all of its shops, there is some hope that HMV could continue under a new (and presumably smaller scale) business model.